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Energy Management Practices of LG Chem
Nov 15, 2011
Sunghee Won
LG Chem
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Contents
I. Introduction of LG Chem
II. Paradigm Shift of Energy Saving
III. Energy Management of LG Chem
IV. EnMS Practices
2 / 21
LG Group Structure
I. Introduction of LG Chem
LG streamlines its business fields into 3 domains as follows.
3 / 21
About LG Chem
I. Introduction of LG Chem
Known as the largest chemical company in Korea,
LG Chem extends its chemical expertise into IT & electronic materials industries,
Such as rechargeable batteries.
• Brief History
1947 Founded Lucky Chemical Industrial Corp.
• 2010 Sales : KRW 19.5 Trillion (based on IFRS)
• Workforce : 16,000 employees (as of Dec. 2010)
Entered into
• Industrial Materials business in 1960s
• Petrochemicals business in 1970s
• Information & Electronic Materials in 1990s
1960~1990s
Corporate Spin-Off
(LG Chem, LG Life Science and LG Household & Healthcare)
2001
Acquired LG Daesan Petrochemicals Ltd. 2006
Acquired LG Petrochemical Co., Ltd. 2007
Demerged Industrial Materials business (LG Hausys) 2009
Acquired Dow Polycarbonate 2010
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Domestic Network
I. Introduction of LG Chem
ㅍ
Ochang Techno Park
Rechargeable Batteries, Display Materials, Imaging Materials
Cheongju Complex
Electrolyte, PCM,
Sensitizer,
Rechargeable Batteries
B
NCC, EO/EG, SM,
BD, MTBE, B-1,
LDPE, LLDPE,
HDPE,PP, Synthetic
Rubbers, PVC, VCM
Daesan Complex
Iksan Plant
ABS Compound,
Engineering Plastics
Octanol, Butanol,
Plasticizers,
Acrylic Acids
Yeosu Complex
NCC, SM, LDPE, HDPE, PVC,
VCM, ABS, SAN, EPS, Acrylate,
OXO-alcohol, NPG, SBS, MBS
SB Latex, BPA
Plasticizers
Gimcheon Plant
SAP
LG Chem HQ (Seoul)
Research Park (Daejeon)
Ulsan Plant
Naju Plant
8 Plants and 1 Research Institute
5 / 21
Global Network
I. Introduction of LG Chem
27 Subsidiaries around the world
Manufacturing Subsidiaries (13) : China (9), Vietnam, India, Poland, USA
Marketing Subsidiaries (6) : China (2), USA, Brazil, Europe, India
Representative Offices (8) : Moscow, Istanbul(2), Ho Chi Minh City, Bangkok, Jakarta, Singapore, Tokyo
LG DAGU : PVC
LG BOHAI : VCM, EDC, C/A
LGCC TJ : EP Comp’d, ABS Comp’d
LG BOTIAN : SBS LGCCI(Holding Company)
LGCE BJ : Polarizer
LG YX : ABS, SBL,
EP Comp’d
LGCE TP : Polarizer
LGCC GZ : EP Comp’d, ABS Comp’d
LG VINA : DOP
LGPI : PS/EPS
LGCE WR : Polarizer
CPI : Li-ion Battery
Cell / Pack
LGCE NJ :
Polarizer, Battery
Beijing
Tianjin
Ningbo
Michigan
Taiwan
Guangzhou
Ho Chi Minh City
Mumbai
Poland
Nanjing
New York
São Paulo
Hong Kong
Frankfurt
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Business
I. Introduction of LG Chem
Main products of LG Chem are ‘Petrochemicals’ and ‘IT & Electronic materials’
IT & Electronic Material
Petrochemical Plant
Chemical Products
Rechargeable Battery for Electric Vehicle
Filter for LCD
Petrochemicals
7 / 21
Energy Efficiency in Korean Petrochemical Industry
I. Introduction of LG Chem
(Ref.) IEA, Worldwide Trends in Energy Use and Efficiency(2008)
• Production : 92 trillion KRW
• 10.8% of manufacturing industry
4th largest manufacturing industry of Korea
• Employees : 137,000
• 4.7% of manufacturing industry
8th largest job market (manufacturing sector)
• Exports : $45.9billion
2nd Largest exporting products (2008)
• Shipment : $116.1billion
• Global market share : 3.6%
World’s 6th largest production
World’s best level of energy efficiency
Low GHG reduction potential
High marginal cost for additional reduction
Statistics
Energy Efficiency
Energy Efficiency of Petrochemical Industries
8 / 21
Korean Policies for GHG/Energy Management
II. Paradigm shift of energy saving
Korean National Target
GHG/Energy Regulatory Progress
(million tons CO2)
2005
594
Increment
Increment
due to
growth
219
- 30%
2020
(Target)
569
- 4%
2020
(BAU)
813
Nov.
2009 ▪ National GHG reduction target setting
Apr.
2010 ▪ Effectuation of Framework Act on
Low Carbon, Green Growth
- GHG/energy target management
- Emission trading
- Carbon tax
Nov.
2010 ▪ Announcement of Emission Trading
legislative bill
- System comes into effect from 2015
- Announcement to reduce 30% of BAU level by 2020
- Selection of the highest target from IPCC’s
recommended range (15 – 30%)
- Reduction Methods : Renewable E, energy efficient
products, green cars, CCS
Mar.
2011 ▪ Enforcement of GHG/Energy Target
Management
- Managing 70% of the national emissions
- Completed 2012 target setting (Sep. 2011)
Corporate GHG reduction and energy saving targets are set along with the national target.
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Transition of Energy Saving Trend
As - Is
Strict National Guideline
Penalty and damage on corporate
reputation
To - be
NPV ≥ 0
(Even the project with NPV < 0 due to
carbon price)
Target Setting Voluntary target Negotiation with the government
Project Development
(Saving Potential
Analysis)
Relatively short Pay-Back Period
: within 1 ~ 2 years
Data Monitoring Internal Guideline
Penalty for not
reaching the target No penalty
Verification No verification Verification by 3rd parties
Others Enery projects will be vitalized with
‘National Emission Trading Scheme’
II. Paradigm shift of energy saving
10 / 21
Competitive Advantage
Corporate Strategy and Energy
III. Energy Management of LG Chem
Energy Management
Energy Technologies
Energy Audit Customer
Carbon Footprint
Polysilicon for Photovoltaic
Business
EV Batteries
Business
Cost Leadership Differentiation
11 / 21
Energy Management Vision
Minimizing Pollution Load Cost Saving
Green Manufacturing
Process
Energy Data
Management
Management of
Energy Efficiency
Indicator
Technology
Development Gov. Program
Enhancement
of energy
management
technology
Transition to low energy consuming structure
Maximization of Energy Efficiency
VISION
Head Office
● Channel for exchanging
energy information
1) Energy strategy development
2) Energy data management
3) Corporate-wide performance
management
Plants
1) Energy reduction planning
2) Energy efficient technology
development
3) Performance analysis / improvement
● Develop / apply
energy efficient technology
Goals
Role
Action Plans
III. Energy Management of LG Chem
12 / 21
Energy Campaign
EIF ‘PRO’ Campaign
Plants
• Energy saving task
forces
• Production process
innovation
• Energy efficient
atmosphere
Process Innovation
P
+
Process Innovation
Companies
& Divisions
• Transition to
low-energy
consuming products
• Investment in new
energy-efficient facilities
• Enhancement of
product added values
Restructuring
Business
R
+
Restructuring
Staff
Departments
• Support conversion of
energy & GHG into credit
• Technical support for
energy saving
• Development of
mid-long term
energy plans
Efficient Supports
O Optimization Management
Implementation
Strategy EIF(Energy Impact Free) ‘PRO’ Campaign
with participation of all departments
III. Energy Management of LG Chem
13 / 21
Energy Campaign
Market Aiming Simplification
& centralization
Acceleration of
execution Achievements
‘PRO’ Process
Energy saving campaign ● 1 campaign for 1 plant
( Catch phrase )
Energy saving T.F.T ● Registration of 2 or more
energy saving themes
for each plant P Process
Innovation
Plants
Activities on
productivity improvement
● Innovations in manufacturing
methods
● With no product defects
Reduction of
absolute amount of uses
● Improvement of energy
intensive processes
● Process destruction R Restructuring
Companies
/Divisions
Training energy experts ● Converting GHG into credits
● Customized train on technology
Enhancement of
energy management
efficiency
● Improvement of transparency
in reduction performances
(government verification)
● Computerization of
energy management
O Optimization
Management
Staff
Departments
Achievement of
mid-long term
reduction plan
GHG
Reduction
III. Energy Management of LG Chem
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Project Management Process
Registration of
1st & 2nd themes
Project Process Monitoring
( Jun, Nov ) Presentation
/ Assessment
( Dec )
Energy Project Management Schedule
F/U
management
Mar. Nov. Dec.
CONTENTS
OUTPUT
-. Selection of subject
process lines
-. Registration
-. Basic activities
analysis
-. Reconfirming
concepts of themes
-. Scheduling
-. Result projection
-. Analysis on factors
to be supported
-. Monitoring changes
-. Effectiveness
identification
-. Spreading method
-. Technology sharing
-. Executed facts
confirmation
-. Effectiveness
analysis
-. Assessment
on practices
-. Reporting following
year’s plan
-. F/U management
-. Developing
next projects
Dec.
June November
-. Monitoring changes
-. Check on progress
-. Consulting on
direction of project
[study beforehand
/advices]
-. Technology sharing
-. Executed facts
confirmation
-. Project sharing
III. Energy Management of LG Chem
15 / 21
National EnMS Trend Korean government is in process of introducing EnMS (Energy Management System)
to reduce energy importing costs and GHG emissions through effective energy management
Needs of standardization and systematic approach of energy savings
- Provision of standard methods for energy reduction through energy efficiency improvement.
- Corporate wide management system construction
- Establishment of national foundation for climate change
- Green Growth 5-Year Plan (2009 ~ 2013) : introduction of NA, EnMS
- The 1st National Energy Master Plan (2008 ~ 2030) : introduction of NA, expansion of EnMS
- The 4th Energy Usage Rationalization Master Plan (2008 ~ 2012) : mandatory EnMS implementation for NA subjects
- Introduction of Energy Target Management / Energy Management System (MKE)
Government policies on energy savings for industry
- Analysis in energy aspect – Energy target setting – Improvement projects – Performance management process
- Identification of energy reduction factors by corporate wide efficiency control & designing / purchase /
internal & external diagnosis
- Securing reliability of energy data
- Building Infrastructure through managing MRV, documents, records, internal verification, and performance
Foundation of Energy Target Management
IV. EnMS Practices
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International Standard Paradigm Shift of Corporate Energy Management
Energy team-level
management
Short-term
improvements
Focused on
energy supply
Bottom-up
target setting
Corporate-wide
management
Mid to long-term
and continual
improvements
Purchasing/planning
teams and end-users
included
Top-down
target setting
Energy Policy
Checking and
correction
Monitoring,
measurement and
analysis
Corrective and
preventive action
Internal
Evaluation
Energy Planning
Implementation
and operation
Continual
improvement
Management
review
EnMS Concept
IV. EnMS Practices
17 / 21
Energy Saving & Climate Change Target Management by Material Balance
Energy using
installation
Energy saving project
Investment effect of
energy saving facilities
Energy saving potential GHG reduction potential
GHG marginal abatement
cost
GHG reduction project
GHG emitting source
Simulation
Load
Calculation
Used to identify
volumes and
capacities of
various facilities
Energy Analysis
• Energy forecast
• Provision of optimizing application condition
전략 구축
Process checkups Link with inventory
System checkups
by simulation Process analysis for
each plant
Draw items Energy saving
items
GHG reduction
items
Simulation efficiency
test
License analysis Applicability test
Cost & effectiveness analysis
Energy saving
effectiveness analysis
Investment analysis Investment analysis
GHG reduction
effectiveness analysis
Confirmation of
implementing
items
Link with
inventory
Implementation plan for EnMS
Strategy to cope with FCCC
Report
Applicability analysis &
consultation with plants
Applicability
&
effectiveness
analysis
Coping with Climate Change through
Energy Saving
Energy Improvement through Simulation
EnMS and GHG Regulations
Improvement
Methods
Strategy
Pre-
Analysis
Pre-investigation, gathering &
analyzing basic data
IV. EnMS Practices
18 / 21
Director of Environment and
Safety Department
Production
Team
EV Production Battery Production
Equipment
Engineering
Team
Production
Team
Executive
Staff
Staff
Environment / Energy Team
[CEO]
[Executive officer for
Energy Management] [Energy Management Team]
[Head of Energy Department]
Production
Team
Energy Management Committee
EnMS Organization (Ochang Plant)
Equipment
Engineering
Team
Equipment
Engineering
Team
Optical Materials Production
IV. EnMS Practices
19 / 21
Energy Facilities &
Measuring Status
Identification
• Identification of status on energy using facilities by developing relevant inquiry forms.
• Identification of status on plants’ energy meters.
Energy Balance • Identification of monitoring points and energy current by drawing energy maps.
• Identification of amount of energy input by each process, facility and plant.
Data Gathering &
Analysis from
Energy Aspect
• Development and management of energy aspect analysis form.
• Management of segmented data : energy cost, power, fuel, and energy intensity.
Analysis Results • Power utilities : compressor, freezer, large pumps
• Heat generating utilities : steam boiler, thermal fluid boiler, RTO
Improvement
Method
• Deriving energy saving items through energy aspect analysis
• Setting targets for technology development & specific energy cost reduction
IV. EnMS Practices
Project Development Process
20 / 21
EnMS National GHG/Energy Mgnt. Energy Audit
GHG reduction & energy saving Objective
Organization & system oriented Plant oriented Installation oriented Subjects
ISO 50001 / KSA 4000 Green Growth Act Energy Usage Rationalization Act Basis
Improvement activities
through systemic approach
Data based target setting
& implementation
Identification of improvement
factors and implementation
through facility diagnosis Characteristics
• Analysis on energy related
works throughout the whole
organizational activities
• Analysis on Specific energy
inventory, effectiveness
• Investigating plants’ energy
usages and target setting
• Rational target setting
considering the BAU
(Business as usual)
• Audit and improvement
activities by processes or
installations
• Consultation from auditing
experts
Basic
activities
• Eco-product purchase
• Considering energy when
adding facilities
• Managing real time energy
data
• Statistical analysis
Regulations & incentives Auditing organizations
& equipments Methods
Application of EnMS with National Energy Policies
Categories
IV. EnMS Practices
21 / 21
Target Management
Green Growth Act Improvement Target
Implementation
• Roles & acts of executives
• Resource support (human, financial, technology)
• Provide authorities & responsibilities
• Eco-product purchase
• Performance assessment
• Incentives
• Energy map
• Inventory & efficiency analysis
• Energy management guideline
• Eco-product design
• Eco-product process
• Energy efficient projects
• Meters & monitoring methods
• Facility audit
• Process re-engineering
• Installation of meters
• Energy efficient facilities
Facility Technology Organization
Energy Data
EnMS Energy Audit
Regular Reporting
Energy Forecast
Future Plans
IV. EnMS Practices
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Thank You!!
